02/15/2010 03:15 PM House LABOR & COMMERCE

         HB 238-LANDLORD REJECTION OF OCCUPANT/SUBLEASE                                                                     
                                                                                                                                
CHAIR  OLSON announced  final order  of business  would be  HOUSE                                                               
BILL NO.  238, "An Act  removing the  number of persons  under 18                                                               
years  of age  in  the household  as a  reasonable  ground for  a                                                               
landlord to reject a proposed sublease or assignment."                                                                          
                                                                                                                                
4:24:19 PM                                                                                                                    
                                                                                                                                
CHARISSE MILLET, Alaska State Legislature,  explained that HB 238                                                               
removes  a potentially  discriminatory  clause  from the  Uniform                                                               
Residential Landlord  Tenant Act which  refers to the  "number of                                                               
persons under 18 years of age  in the household."  She elaborated                                                               
on  the bill.   Section  1, AS  34.03.060 (d)  lists a  number of                                                               
reasons for which a landlord may  refuse consent to a sublease or                                                               
assignment  of a  lease.    Included in  the  list of  reasonable                                                               
grounds for rejecting  the sublease to the tenant  is the "number                                                               
of persons under 18 years of  age in the household." According to                                                               
the Department  of Housing and  Urban Development's  (HUD) Office                                                               
of Fair  Housing and  Equal Opportunity  this provision  could be                                                               
interpreted  by the  public to  allow  housing discrimination  in                                                               
violation of federal law. "Familial  status" is a protected class                                                               
under  federal fair  housing law.  AS 34.03.060  (d)(3) could  be                                                               
interpreted to  allow discrimination because it  not only allows,                                                               
but appears to propose that a  landlord may refuse to sublease on                                                               
the reasonable grounds  of "the number of persons  under 18 years                                                               
of age in the household."                                                                                                       
                                                                                                                                
REPRESENTATIVE  MILLETT  explained that  HB  238  is intended  to                                                               
bring Alaska's  Landlord Tenant  Act into  line with  the Federal                                                               
Fair Housing  Act. Not only  will this proposed bill  help insure                                                               
that Alaska continues to receive  federal housing program funding                                                               
under  the  federal  programs,   including  the  Home  Investment                                                               
Partnership Act,  the Community Development Block  Grant, and the                                                               
Emergency Shelter  Grant Program,  which averages $6  million per                                                               
year.  Additionally,  the bill helps insure  that landlords treat                                                               
potential tenants fairly regardless of their family situation.                                                                  
                                                                                                                                
4:25:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  how the  issue was  brought to  her                                                               
attention.                                                                                                                      
                                                                                                                                
REPRESENTATIVE MILLETT  responded that  the amount of  money from                                                               
federal programs  would be affected.   She  also did not  want to                                                               
negate the matching funds.                                                                                                      
                                                                                                                                
4:26:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT, in  response  to Representative  Neuman,                                                               
explained  that   the  current  language  in   existing  statutes                                                               
includes a list of reasonable  grounds for rejecting the sublease                                                               
to  the tenant,  which includes  the number  of persons  under 18                                                               
years of  age in the  household.  She  wanted to be  certain that                                                               
Alaska law does not discriminate against families.                                                                              
                                                                                                                                
4:26:48 PM                                                                                                                    
                                                                                                                                
BRYAN   BUTCHER,   Director,   Governmental  Affairs   &   Public                                                               
Relations, Alaska  Housing Finance Corporation  (AFHC), explained                                                               
that the  AHFC received a  copy of a  letter dated July  18, 2007                                                               
from the U.S.  Department of Housing and  Urban Development (HUD)                                                               
which  brought to  the AHFC's  attention an  issue raised  by the                                                               
HUD's  Office of  Fair Housing  and Equal  Opportunity.   The HUD                                                               
advised that  the issue of potential  discrimination could affect                                                               
HUD's future  acceptance of the State  of Alaska's certifications                                                               
to affirmatively  further fair housing and  compliance with anti-                                                               
discrimination laws.  The HUD's  Office of Fair Housing and Equal                                                               
Opportunity  pointed   out  that  the  state   law  cannot  allow                                                               
landlords  to discriminate  against potential  tenant's subleases                                                               
based on the number of persons  in the household under the age of                                                               
18.    He explained  that  if  the  state  does not  change  this                                                               
provision  in  AS  34.03.060 (d)(3),  which  can  be  potentially                                                               
interpreted  to allow  familial status  discrimination, that  the                                                               
state could lose  up to $6 million for  three programs previously                                                               
mentioned  by  the  sponsor.     He  advised  that  Mark  Romick,                                                               
Director, Planning & Program Development,  AHFC is also available                                                               
for questions.                                                                                                                  
                                                                                                                                
4:27:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  asked what  programs would be  affected if                                                               
the $6 million were redirected.                                                                                                 
                                                                                                                                
MR. BUTCHER  responded that most  of the  funding is for  a block                                                               
grant  to the  Department  of Commerce,  Community, and  Economic                                                               
Development  for  the  development  of low  income  housing,  the                                                               
Community Development  Block Grants  (CDBG) primary  objective is                                                               
to develop viable  communities by providing decent  housing and a                                                               
suitable   living   environment   and   by   expanding   economic                                                               
opportunities,  principally  for  persons   of  low  to  moderate                                                               
income.   The  Emergency  Shelter Grant  Program (ESGP)  provides                                                               
homeless  persons with  basic  shelter  and essential  supportive                                                               
services.   The funds  can assist with  the operational  costs of                                                               
the shelter  facility, and for  the administration of  the grant.                                                               
This grant  program also provides short-term  homeless prevention                                                               
assistance  to  persons at  imminent  risk  of losing  their  own                                                               
housing due to eviction, foreclosure, or utility shutoffs.                                                                      
                                                                                                                                
4:29:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON posed  a scenario  in which  a landlord                                                               
has a 2-bedroom apartment for rent.   If a prospective tenant has                                                               
four  children,  but the  apartment  under  consideration is  too                                                               
small for  six people,  whether the  landlord would  need another                                                               
reason to decide not to rent to them.                                                                                           
                                                                                                                                
MR.  BUTCHER stated  that  too many  occupants  is an  acceptable                                                               
reason to  decline, but  if a landlord  had a  six-bedroom house,                                                               
and decided  it would be acceptable  to rent to a  family of six,                                                               
the landlord could  not base a decision not to  rent to a family,                                                               
solely based  on the fact that  they had children under  the ages                                                               
of 18.                                                                                                                          
                                                                                                                                
REPRESENTATIVE T.  WILSON clarified that a  landlord could decide                                                               
the number of  people, but could not base a  decision not to rent                                                               
to someone based on those under 18 years of age.                                                                                
                                                                                                                                
MR.  BUTCHER answered  yes.   He stated  that the  state statutes                                                               
refer to a  list of items a landlord can  ask prospective tenants                                                               
in their  rental agreement for  sublease or assignment  of lease.                                                               
The state  statute refers to  reasonable grounds for  rejecting a                                                               
sublease and lists  the "number of persons under 18  years of age                                                               
in  the household"  as one  of  the items.   The  HUD found  that                                                               
asking prospective  tenants the  specific question may  appear to                                                               
propose  that the  landlord might  refuse consent  to a  sublease                                                               
based solely on  the number of children in a  household, which is                                                               
in violation of federal law.                                                                                                    
                                                                                                                                
4:31:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN  related a scenario  in which a  landlord has                                                               
an  apartment to  rent.   He offered  his understanding  that the                                                               
landlord could not limit the number  of people who could rent the                                                               
apartment,  or  the  number  of people  who  could  sublease  the                                                               
apartment.                                                                                                                      
                                                                                                                                
MR.  BUTCHER answered  that a  landlord could  still legitimately                                                               
limit the number  of people an apartment can hold  for a lease or                                                               
a sublease, so long as it  is reasonable.  In further response to                                                               
Representative  Lynn,  he stated  what  is  at  issue is  that  a                                                               
landlord  cannot  specifically   discriminate  in  the  sublease,                                                               
against a prospective tenant based  on some of the family members                                                               
are children being under the age of 18.                                                                                         
                                                                                                                                
REPRESENTATIVE  LYNN understood  that  the  landlord could  still                                                               
limit the  number of  persons who could  occupy an  apartment, in                                                               
either the lease or the sublease.                                                                                               
                                                                                                                                
MR. BUTCHER agreed.                                                                                                             
                                                                                                                                
4:32:34 PM                                                                                                                    
                                                                                                                                
MR. BUTCHER, in response to  Representative Neuman, answered that                                                               
a landlord can make decisions on  the number of people allowed in                                                               
a unit,  but cannot  specifically discriminate  against children.                                                               
For  example, if  a landlord  decides that  it is  reasonable for                                                               
five people to  rent a two-bedroom apartment,  the landlord could                                                               
not  decide  to  discriminate  in  a  sublease  by  not  allowing                                                               
children.   He emphasized that landlords  can legitimately decide                                                               
to set limits on the occupancy to  five.  The federal law is very                                                               
detailed  about what  constitutes  discrimination.   He  recalled                                                               
reviewing  the federal  law,  and the  list  of prohibitions  was                                                               
quite  lengthy, so  it  did  not surprise  him  that the  federal                                                               
agency found a discrepancy in the state's law.                                                                                  
                                                                                                                                
4:34:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN disclosed  that  one of  his daughters,  who                                                               
resides in Indiana, has eight children, and rents.                                                                              
                                                                                                                                
4:34:50 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on HB 238.                                                                                     
                                                                                                                                
4:35:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN remarked  that  the bill  makes sense  and                                                               
will  clean  up  Alaska  statutes.    He  thanked  Representative                                                               
Millett for  her commitment to  making Alaska the best  place for                                                               
children.                                                                                                                       
                                                                                                                                
REPRESENTATIVE NEUMAN  moved to  report HB  238 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 238 was reported  from the                                                               
House Labor and Commerce Standing Committee.